Breakaway Bounce In Techs Truncated As Strong Stats Stir Sellers

It was supposed to be a blockbuster day for the Nasdaq following yesterday's blowout earnings from Amazon, and solid results from Intel and Microsoft. The anticipation of a surge in the tech index was so great it prompted Gartman to quickly close out his Nasdaq short and... the Nasdaq went nowhere all day!

Even Amazon's surge, which at one point hit an all time high of $1,638, or up nearly $120, faded most of the move, and at last check was up only $50, having wiped out more than half of its record gains.

Call it deja vu all over again: the pattern that we had seen for much of earnings season was again in force, as after reporting strong outstanding results, all the tech giants had a tough time holding on to all their gains. At its high of the day, the S&P 500 Information Technology Sector was up 1 percent, but by midday it dropped into the red. It’s a pattern that’s plagued this earnings season: Even though companies are beating earnings predictions at the fastest rate ever, stocks have remained relatively flat since JPMorgan kicked off reports.

It wasn't just tech with the notable moves however, as two two biggest U.S. oil explorers also reported earnings, which were a study in contrasts: Chevron beat every analyst estimate, while larger rival Exxon Mobil Corp. fell short on both production and profit. As Bloomberg summarized this divergence, for Chevron, it was about rewarding long-suffering investors who had funded costly natural gas projects in Australia for more than a decade. For Exxon, Chief Executive Officer Darren Woods is tasked with rebuilding an asset base that analysts say didn’t receive enough investment over the past 10 years.

And here a stunning statistic from Bloomberg: Exxon Mobil has lost $47 billion in market value in the past 12 weeks, or about the size of one Halliburton

Meanwhile, in other asset classes, moves were bizarre too, with yields on 10-year Treasuries dropping...

... even as the curve resumed its bull flattening. Treasuries advanced Friday led by long end, erasing early losses triggered by strong 1Q GDP and employment cost index; yields and curve spreads moved to session lows as USD/JPY dropped below 109 for first time in a year, and as sharp reversal in technology and energy sectors capped gains for U.S. stocks.

Indeed, despite today's GDP beat and stronger Employment Cost Index, the dollar initially ramped higher, only to slump to session lows.

There were two prevailing explanations for today's lack of enthusiasm: either investors were debating whether corporate earnings are strong enough to offset signs the economy may be cooling, or today's economic data was strong enough to assure another imminent rate hike, further flattening the yield curve and leading to a policy error.

All perfectly contradictory, of course.

Elsewhere, the U.K. posted the worst quarterly GDP figures since 2012... 

... and the pound plunged.

Lackluster numbers also came out of France and Spain, however they were not lacking enough luster to push the euro lower!

The comatose session extended to crude oil which was drawn to the $68-a-barrel level as a geopolitical risk premium in the market limited losses.

And the worst news: after all of that, the S&P closed unchanged on the week.

Comments

TheSilentMajority TheWholeYearInn Fri, 04/27/2018 - 16:34 Permalink

Amazion has huge growth problems not yet recognized by most sheep...

- retail is hardly making any profit(and usually a loss) even though they have already saturated the USA, and they also rape the taxpayer funded USPS(which may end soon). As such, their retail business model is now proven as unsustainable. 

- raising the Prime membership price by an absurd 20% overnight will further destroy the subscriptions/growth 

- AWS makes a relatively decent profit, but they are in a highly competitive commoditized business which will face increasing margin pressure

- their P/E is in the stratosphere and will never be justified, even if AWS becomes the market leader

As such, only a Tesla or pets.com type of dreamer would gamble on it.

In reply to by TheWholeYearInn

gdpetti TheSilentMajority Sat, 04/28/2018 - 11:18 Permalink

But Amazon is part of the club... bankster/intel/deep state supported, so profits are meaningless.. market saturation, exploitation...  basically, empire building is all that counts... dominate the market... like any virus, until it consumes its own host and dies with it... suicide.

All of this is showing that the market is tired and is flatlining... the pump is fading... the page has been turned in the script for engineered market collapse... out with the OWO, in with the NWO.. on the ashes of the old... same as usual... if it wasn't for the wild card of Mother Nature... but the OWO doesn't need to know about that... they have served their masters well and can now die in service to them as a final parting gift. THe same question applies of how fast or slow the collapse occurs... thus all the chart comparisons to past cycles.... at least until Big Momma arrives to close out the Grand Cycle....

Until then, all news is bad news.... the dope high is fading.. and without ever larger free supplies, we are looking at the end of a party.

In reply to by TheSilentMajority

Let it Go Sat, 04/28/2018 - 07:10 Permalink

The so-called FANG stocks have accounted for much of the stock market rally we are witnessing, however, it might be wise to step back and question the fundamentals behind the upward movement of this group. Stocks that trade at crazy multiples such as Amazon at around 350 times earnings ignore and defy reality.

Amazon bought Whole Foods paying top dollar to go against Kroger with a PE of 17 times earnings. This move was heralded as brilliant rather than a reality check. How can the earnings of a food chain leap in value from a multiple in the teens to a multiple of several hundred? More on the potential of these stocks to bite investors when they fall in the article below.

 http://Fang Stocks Have The Potential To Bite Investors html